Industrial demand shifts toward longer-tenure assets amid cautious operating environment: Savills Singapore
Values of 30-year leasehold industrial possessions monitor by Savills fell 0.6% q-o-q to $353 psf in 1Q2026, mirroring a lesser hunger amongst capitalists for such assets. In contrast, worths of 60-year leasehold assets climbed up 1.4% q-o-q to $569 psf throughout the very same duration. Freehold properties saw also stronger growth, with prices increasing 2.9% q-o-q to $876 psf.
Savills expects view in the commercial market to stay careful, as the Middle East conflict potentially weighs on economic action in the coming months. Against this background, financier and occupier demand are expected to stay careful, skewing in the direction of “contemporary, well-located and higher-specification assets,” states Alan Cheong, executive director for research and working as a consultant at Savills Singapore.
Singapore industrial sales weakened last quarter, amidst an extra mindful operating setting. JTC Corp’s sales caution data reveals that strata commercial sales dropped 17.5% q-o-q to 335 offers, the lowest quarterly volume since 2020, says Savills. “The controlled turn over reflects persisted buyer selectivity, with capital deployment greatly focused in assets offering stronger basics, longer-term value conservation, or operational advantages,” the record includes.
In the rental market, overall leasing volume additionally moderated, with JTC rental information showing a 1.2% q-o-q decrease to 2,867 purchases in 1Q2026. On the other hand, rental price activities were combined, underscoring an extra careful leasing market.
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” The more powerful efficiency of longer-tenure properties highlights a flight to quality and tenure security, with capitalists increasingly prioritising properties that offer better long-term worth retention in a more selective investment atmosphere,” the record explains.
Consequently, Savills Singapore is projecting general rental growth throughout many industrial segments to remain secure this year. The company is anticipating rental growth for multiple-user factories and business parks to come in between 0% and 2% in 2026, whilst warehouse and logistics rents are anticipated to expand in between 0% and 1%.
Leas for Savills’ basket of prime storage facility and logistics properties rose 0.4% q-o-q to $1.83 psf each month, supported by durable need for premium logistics facilities. On the other hand, rental fees for prime multiple-user warehouses tracked by Savills fell by 1.4% q-o-q to $2.27 psf, which the firm attributes to “greater occupant selectivity and prices sensitivity within the prime exclusive factory section”.
While transaction quantity dropped, Savills keeps in mind that need stays maintained for “well-positioned assets with a reasonable total value quantum”. Specifically, the company highlights a clear change in customer choice towards commercial possessions with longer land tenures.
Industrial properties with a lot longer periods in Singapore are seeing higher demand, as worldwide uncertainties prompt a flight to quality among occupiers and investors, according to a research report by Savills Singapore.
